FAO report highlights 'alarmingly' high food price increases, forecasts food import bills could exceed $1T in 2010

Nov 18 2010

International food import bills could exceed $1 trillion in 2010, the U.N. Food and Agriculture Organization (FAO) said Wednesday in its Food Outlook report (.pdf), which found that wheat and other food staple prices have increased "alarmingly" over the past year, the Associated Press reports (11/17).

In a press release, the FAO warned the "international community to prepare for harder times ahead unless production of major food crops increases significantly in 2011." The agency predicts that food import bills for the world's "poorest countries" will rise 11 percent in 2010, while bills for "low-income food-deficit countries" will go up by 20 percent, the release states. "This means, by passing a trillion dollars, the global import food bill will likely rise to a level not seen since food prices peaked at record levels in 2008," according to the press release (11/17).

"With the pressure on world prices of most commodities not abating, the international community must remain vigilant against further supply shocks in 2011 and be prepared," the FAO report said, the AP writes. "Still, it said that supplies of staple food crops were more ample now, lessening the risk of a similar crisis. But it cautioned that 'world prices have risen alarmingly and at a much faster pace than in 2007/2008,'" the news service reports (11/17).

"The FAO painted a worrying picture in its twice yearly Food Outlook report, warning that it was crucial for farmers to 'expand substantially' cereal production in 2011-12 to meet expected demand and to rebuild world reserves. But the Rome-based agency warned the production response could be limited as rising food prices have made other crops, from sugar to soybean to cotton, attractive to grow," the Financial Times reports.  

"The FAO has until now largely downplayed the gravity of the developing crisis, forecasting lower prices next year," according to the newspaper. "But the new forecasts signal that FAO officials now believe further price rises are likely in 2011. The warning is the strongest yet of a potential repetition of the 2007-08 food crisis, when the cost of agricultural commodities surged to a record and sparked food riots in poor countries" (Blas, 11/17).

"The FAO said markets have rarely shown such volatility and uncertainty in such a short period as they have in early months of the marketing season from July to October because of the bad weather," the AP writes (11/17). Rice reserves are expected to increase by six percent, the report said, according to the press release (11/17).

Food Shortages Expected In Parts Of East Africa

The Kenya-based Food Security & Nutrition Working Group told aid organizations on Wednesday to "prepare for food shortages in parts of East Africa amid forecasts of erratic rains across the region," Bloomberg reports. "Uganda, Sudan and western Kenya may face flooding between late 2010 and mid-2011, while parts of Rwanda and Burundi, eastern Kenya, Somalia, southeastern Ethiopia and Djibouti could suffer from failed rains, according to an e-mailed statement today from the organization." A La Nina climate, which creates cooler temperatures on the ocean's surface in the eastern tropical Pacific, is expected to lead to erratic rains (Davison, 11/17).